a traditional build-out.
ALUR glass and dividing walls are movable and thus, considered furniture. As such, ALUR products can utilize a normal 7 year depreciation schedule as opposed to 39 years used for dry-wall and construction used in traditional office build outs. Demountable walls are classified as furniture by the IRS and therefore qualify for accelerated depreciation.
In addition, ALUR Walls may qualify for 100% first year tax depreciated under Section 179c. For more information, refer to www.Section179.org and confirm with your tax planner to see how this may apply to you. This represents a significant tax advantage over conventional construction.
Depreciation is an income tax deduction that allows a business to take an annual allowance for the wear and tear of a property, and this deduction is spread out over the useful life of an item as determined by the IRS (see IRS Depreciation Schedule below).
Traditionally, companies created private offices and conference rooms by constructing drywall. Because drywall is considered a permanent fixture of a building, they are depreciated like a building—over 39 years! This means significantly less depreciation deductions and therefore, higher taxes each year.
ALUR walls offers tax-saving alternative — demountable walls. Because our (floor-to-ceiling) walls are demountable, the IRS treats them as furniture. This means that companies can depreciate ALUR walls in seven years, allowing for greater depreciation deductions for a more efficient cost savings sooner than a traditional build-out.
For further guidance on taking advantage of tax benefits, be sure to consult your tax professionals.
Section 179 of the IRS tax code allows businesses to deduct the full purchase price of qualifying equipment purchased or financed during the tax year. That means that if you buy (or lease) a piece of qualifying equipment, you can deduct the FULL PURCHASE PRICE from your gross income. It's an incentive created by the U.S. government to encourage businesses to buy equipment and invest in themselves.
First Year Write Off:
($500,000 = maximum in 2015)
50% Bonus First Year Depreciation
(updated to 50% via PATH Act of 2015)
Normal First Year Depreciation
(20% in each of 5yrs on remaining account)
Total First Year Deduction
($500,000 + $75,000 + $15,000)
($590,000 x 35% tax rate)
Equipment cost after Tax:
(assuming a 35% tax bracket)